• BusinessWeek , Tuesday, April 15, 2008 11:45 AM

Cellular carriers like Verizon Wireless and AT&T are missing out on content revenue as consumers bypass their offerings and head straight to the Web to download mobile ringtones, music, wallpaper, applications, and other services.

Carrier Web portals, the gateway to the mobile Web for most cell phone owners, currently account for about 80% of content purchased on mobile phones. But not for long. Strategy Analytics analyst David Kerr said their share will shrink to 25% in five years, as the mobile Web matures.

The carriers claim they're not that concerned. "The content piece is not as meaningful for service providers as access," said Kevin Packingham, vice-president for product development at Sprint Nextel. "That's what's really going to move the needle." The comments Packingham and other peers quoted in the BusinessWeek article can be interpreted as a collective change of heart among wireless carriers-and a win for the likes of Google, because mobile carriers for a long time saw content as a major potential revenue source for them.

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